A Greek Trader Tells Us The State Of Things, And Explains Why The Worst Is Yet To Come

A trader in Greece relays the mood to us. Basically: The painful
part of austerity hasn't even hit yet, nobody in Europe has any
idea what's going on, and social strife, if it seems bad now,
will become a daily issue.

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All is as well as can be, under the circumstances.

The decisions that will announced this coming Wednesday probably,
will be critical to forming the sociopolitical and economic
background for the next year or so. Meantime, keep in mind that
most recent govt decisions and measures, including those voted
for this past Thursday, have not yet been implemented.

Even the additional taxes on income and property that have been
levied, have in large part not yet been invoiced due to apparent
software glitches related to printing the relevant forms.

In that respect, the social turmoil that we are currently
observing relates mostly to announcements alone, so far. Over the
next few months, these announcements will have to be implemented.
The additional taxes will have to paid, state / public workers
will actually be laid off. Unemployment in the private sector
continues and will continue for the foreseeable near term at
least, to increase. Incomes are being cut both in the public
sector and now also in the private sector as labor market
rigidities in the legal framework are being substantially
reduced, labor unions are marginalized and tax laws are revised
and extended. Pensions have already been significantly reduced
and will most probably be reduced even further.

The impact of most of what I have noted above is only now just
beginning to be felt. The actual implementation of these changes,
is mostly still ahead of us and they will gradually be enforced
over the next 6 months or so, as the ''internal devaluation''
concept is actually implemented.

One can only reasonably expect, therefore, that social tensions
and revolt will increase as what today still remains merely
expectations stemming from govt announcements, turn into daily
reality. Obviously, no one can yet predict or foresee what the
end game will be. I doubt whether even the leading European
policy makers have a clear picture of the path to the crisis
resolution. Everybody concerned seems
to be improvising and to be engaged in some kind of erratic trial
and error proceedings.

Unfortunately, I do not think that anybody today can be anything
but pessimistic regarding the near to medium term future.
Meantime we hope for the best, while preparing for the worst.